Leaving the EU: Infrastructure in Wales

Aberconwy MP and Wales Office Minister Guto Bebb spoke in a Westminster Hall debate on the effects of Exiting the EU on Businesses in Wales.

 

2.30 pm

Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
I beg to move,

That this House has considered the effect of the UK leaving the EU on infrastructure in Wales.

It is a pleasure to serve under your chairmanship for the first time, Mr Flello. It is also a pleasure to see so many colleagues from across Wales here today and, of course, the Minister, with whom we have debated these issues on many occasions. I am sure that he will enjoy listening to the contributions today.

We have heard the Prime Minister’s speech this morning. It is a great pity to me that she chose to make the speech outside, to the media and ambassadors, and not to this House. As I just said in the Chamber, that would not have happened under Churchill or Thatcher, but this lady does not seem to be for turning up to this place when it comes to this issue.

I have read what the Prime Minister and the Secretary of State for Exiting the European Union had to say today. The Prime Minister did talk about the devolved Administrations and nations, which of course is to be welcomed. The Secretary of State has just said:

“We will aim to strengthen the Union between our four nations. We will continue to engage”—

whatever that means—

“with the devolved Administrations, and we will ensure that as powers are returned from Brussels to the UK, the right powers come to Westminster and the right powers are passed to Edinburgh, Cardiff and Belfast.”

I note that there was no clarity on devolved administrations in London and other places across the UK, but we are here to talk about Wales.

The Secretary of State listed the 12 principles of the plan. We are told that those are the totality of the plan promised to Parliament; he just confirmed that to me. There will be no White Paper. There will be no further plan. This is it: 12 principles. Among those, I do not see anything about regional funding or funding for infrastructure. There are some vague commitments on boosting science and innovation and making our exit smooth and orderly. However, when it comes to the fundamentals that affect the viability of the Welsh economy—the infrastructure we have to drive jobs and to allow business and trade, and all these things we are told will happen—we have absolutely nothing.

 

Kevin Brennan (Cardiff West) (Lab)
I am grateful to my hon. Friend and neighbour for giving way. Does he agree that, if Wales is to understand what the Prime Minister’s statement means in relation to Welsh infrastructure, a White Paper really must be published, so that we can debate it and there can be a wider public debate on the implications of the model she has put forward today?

 

Stephen Doughty
I absolutely agree. That is pretty fundamental when it comes to relationships with the devolved Administrations and legislatures. It is all very well to say “engage” in this vague way, but what does  that mean? Is it simply window dressing? Are we in the devolved Administrations just to accept whatever the UK Government come up with, without any question or scrutiny? That is even harder to do without a White Paper.

There was much in it I disagreed with and contested, but the Scottish Government before their independence referendum published a very detailed White Paper. We simply do not have that. We are told that these 12 principles and this speech today are all we have before we enter one of the most fundamental changes to impact Wales and this country for generations to come.
 

Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
The hon. Gentleman mentioned the Scottish Government. They produced a Brexit White Paper. The Welsh Government are about to publish their own Brexit White Paper. Is it not bizarre that the one Government responsible for delivering Brexit are not going to publish their own White Paper?
 

Stephen Doughty
We do not always agree on everything, but I absolutely agree with the hon. Gentleman on that—particularly when we see very different visions emerging from members of the Cabinet as to what a post-Brexit UK and Wales might look like. We heard the Chancellor of the Exchequer suggest in Germany that the UK is going to have a race to the bottom and be a completely deregulated tax haven on the fringes of Europe. That is not what I believe the people of Wales voted for. They voted for a strong economy with strong rights. They might have had different views on immigration or the democratic deficit there has been in parts of the EU, but they did not vote for a race to the bottom or for us turning into some sort of Gibraltar or one of our overseas territories on the fringes of Europe.

Leaving the EU will have a significant impact on the funding and development of infrastructure in Wales. We all know of examples in our constituencies of where European funding has delivered results, whether that is in community facilities in Butetown in my constituency, road infrastructure or science and innovation in our universities. We have no clear answers as to what will happen to that infrastructure support for Wales post-2020 and what will replace it. Businesses and investors need certainty about the infrastructure and environment that will support their long-term decisions, so it is vital that we have greater clarity. We need clarity in particular on issues such as loans made by the European Investment Bank, which I will come on to, and the specific assessment criteria that will be used to guarantee funding for projects signed after the autumn statement but while we remain a member of the EU.

I am sure that many hon. Members will mention individual projects. I will give some examples. EU funding in recent years has supported many infrastructure projects—for example, through £40 million towards Swansea University’s new Bay campus; nearly £4 million towards the development of the Wales coastal path; £9 million towards Rhyl harbour; and the dualling of the A465, the “heads of the valleys road”. Many prospective infrastructure projects are yet to be properly finalised, such as the Swansea Bay city deal, the North Wales growth deal, the tidal lagoons and the South Wales  metro, which I raised in a previous debate and is of great concern to my constituents in Cardiff South and Penarth. Of course, the uncertainty around those projects has not only been caused by the referendum result; there are other factors at play, but that is a crucial part of whether those projects go forward.
 

Nick Thomas-Symonds (Torfaen) (Lab)
It is a pleasure to serve under your chairmanship, Mr Flello. My hon. Friend talks about specific projects. I particularly have in mind the £106 million that is earmarked from the European regional development fund for phase 2 of the South Wales metro. Does he agree that, for projects such as that, it is all about certainty, and that it is in the hands of the UK Government to provide that certainty?
 

Stephen Doughty
I absolutely agree. It is about not only certainty of the funding for projects but managing the growth of rapidly growing areas in south Wales. In my own city of Cardiff in particular, we need to know that we are going to have the transport infrastructure to cope with the anticipated demand. The South Wales metro is crucial to that.
 

Chris Elmore (Ogmore) (Lab/Co-op)
I have two brief points. One is about a specific project. My hon. Friend will be aware that, in Sarn in my constituency, significant transport investment brought a McArthurGlen designer outlet, ensuring that jobs and services were created. We can see real examples of where transport infrastructure works. In terms of planning and Government giving some reassurance, this situation places local authorities and the Welsh Government in extreme difficulty. Does he agree that it is all good and well the Welsh Government putting in processes for local development plans around highway infrastructure investment but, if we do not know what the funding is beyond 2019, it is virtually impossible for local government in Wales to deliver large-scale transport infrastructure projects?
 

Stephen Doughty
My hon. Friend makes an important point. It is about long-term certainty for not only businesses but residents and local authorities. He mentioned McArthurGlen, which I am sure many of us have used. Many people do not know that the transport infrastructure and hub there were supported by European funding, which made a huge difference to access to the lower part of his constituency and, indeed, to the M4 corridor.
 

Paul Flynn (Newport West) (Lab)
Could we add to the comprehensive list of threatened infrastructure projects in Wales the Dŵr Uisce scheme—those are the Welsh and Irish words for water—between Ireland and Wales, which is very exciting? It uses water technology in a very effective, environmentally clean way. That will be in a special category, because if Brexit goes ahead, half of the scheme will be in the EU and half of it will be outside it. Does my hon. Friend foresee the chaos and the serious threat to that valuable scheme that would result?
 

Stephen Doughty
Indeed. It is about the detail of these types of project. I was not aware of that particular one, but it is a very good example. Many of us in Wales have personal family connections to Ireland. We certainly have connections in our constituencies. More importantly,  there are crucial connections between our economies, services and infrastructure; my hon. Friend makes a valid point.

The EU’s structural funds over the past 30 years have been vital in supporting regional development and the growth of the Welsh economy. They have supported people into work and training, youth employment, research and innovation, business competitiveness, renewable energy and energy efficiency, connectivity and urban development. The central aim of the current structural funds programmes is to create an environment that will support economic growth and jobs. Obviously, there are huge implications if we are not part of that.

Under the current round of structural funds, which runs from 2014 to 2020, Wales has been allocated almost £2 billion, with £1.6 billion going to west Wales and the valleys and more than £325 million going to east Wales. In total, along with match funding, the current round of structural funds is expected to support total investment in Wales of approximately £3 billion. Indeed, research undertaken by Cardiff University’s Wales Governance Centre prior to the referendum concluded that the £658 million of EU funding for Wales from the common agricultural policy and the European structural funds made Wales a net beneficiary of EU funding. In 2014, the estimated net benefit from the EU for Wales was around £245 million. That is equal to about 0.4% of Welsh GDP—it equates to around £79 per head—in 2014.

I talked about the history of these investments. That is the third time that west Wales and the valleys have qualified for the highest level of structural fund support, which is available to regions in the EU that qualify with GDP per head that is less than 75% of the EU average. I have long supported that principle and am yet to be clear, in any way, what the UK Government’s plan is for replacing those structural funds to reduce some of the inequalities that are built into some of our post-industrial economies in particular and rural areas. The spending has been aimed at supporting projects intended to transform the prospects of the most marginalised and vulnerable, to lead to increases in productivity and growth and to invest in the future of our young people in Wales.

Following the vote to leave the European Union, investment in infrastructure in Wales has already experienced some setbacks, with postponements of some asset sales and a downsizing of some projects, according to ratings agency Standard & Poor’s. In a broader note to clients in September, Standard & Poor’s stated that the biggest risks for infrastructure companies could be a likely reduction in capital investment—both domestic and foreign direct investment.

I want to mention the South Wales metro again. It would be useful to know whether the Minister can add any clarity on this. The metro is crucial to my own constituency and the First Minister, Carwyn Jones, has described it as “a catalyst for transforming” the Welsh economy. He made that clear when he met the Commission in December to seek assurances that it will continue to support the project and that it will not be affected by the Brexit negotiations.
 

Jessica Morden (Newport East) (Lab)
The metro is absolutely crucial for connectivity and economic development in my constituency, too. Does my hon. Friend agree that it would be particularly helpful today  if the Minister could be crystal clear that any shortfall is guaranteed by the UK Government, including beyond 2020?
 

Stephen Doughty
Absolutely. We need that sort of clarity, which is clearly absent from the so-called plan that has been put before us today by the Prime Minister and the Brexit Secretary. I emphasise that the metro is far more than just a transport scheme—it is a vehicle for transforming the economic and social prospects of many of our communities. It will deliver jobs and connectivity as well as those faster journey times and more frequent services that we all want to see.

It is also of note that, in addition to the funds I have mentioned, at present both public and private organisations in Wales can bid directly to the European Commission for funding from other programmes such as the Connecting Europe Facility and Horizon 2020, which supports many of our academic research projects. Those can also provide funding for infrastructure projects. The House of Commons Library suggested that it is difficult to quantify the funding from each of the direct funding programmes but, to give an idea of the scale, the CEF fund is worth €30.4 billion in total over the 2014-20 period. That covers areas such as transport, energy, and telecoms. CEF projects currently funded in Wales include the South Wales railway electrification studies that were conducted around the electrification programme. The Welsh Government and Welsh ports are also in discussions—here, again, are the links with Ireland—with the Irish Government and Irish ports on access to the “motorways of the sea” funding, which can be used to invest in crucial port infrastructure and hinterland connections to ports.

The Horizon 2020 programme has awarded €40 million of grants to organisations in Wales, as of 23 February 2016, and the predecessor to Horizon 2020—the seventh framework programme—allocated €145 million to organisations in Wales. We absolutely need that certainty. I have spoken to many academics locally who are deeply concerned about their ability to participate in these cross-European infrastructure projects based in the academic sector. The issue is not just what that valuable research and co-operation can engender in terms of knowledge and understanding of crucial issues, but the link to products and the frontline economy. Many businesses in my community, particularly in some of the business parks, have strong links with the high tech and biotech industries that have developed around universities such as Cardiff University.

I mentioned the European Investment Bank. I hope that the Minister can provide some clarity about what Wales’s relationship could be post-2020. The European Investment Bank is a significant source of finance for UK infrastructure projects. In 2015 the lending to the UK amounted to €7.7 billion, of which two thirds was provided for infrastructure. Programmes in Wales included €340 million for Welsh Water to make improvements to water supply and wastewater collection, and €174 million for Wales & West Utilities to upgrade and expand gas distribution networks. This funding is integral not only to those high-profile road junctions and road projects and things such as the South Wales metro, but to the utilities that ensure the functioning of our communities.
 

Carolyn Harris (Swansea East) (Lab)
It is a pleasure to serve under your chairmanship, Mr Flello. After last week’s review from Charles Hendry on tidal lagoons, I  was very proud that he noted the enthusiasm and confidence that the city has had in the tidal bay project. That enthusiasm overflows into the city bay region. In these uncertain times, is now not the time for the Government to commit the important resources in order to take forward these exciting plans, which could see Wales develop as a world-renowned “first” in so many of the fields in respect of tidal power?
 

Stephen Doughty
My hon. Friend makes a powerful point. She knows that I have long supported the principle of tidal power coming from the Severn estuary. There have been concerns about some of the projects proposed, but I am interested in and support the proposals for tidal lagoons—obviously each needs to be judged on its own merits—and particularly the Swansea one. So much work has gone into that and it is crucial that we now provide certainty on delivery and funding to enable it to go ahead.

Briefly, the chief of the EIB, Werner Hoyer, stated in October:

“Even if we find a way to continue lending in the UK, I am absolutely sure that the enormous volumes we have achieved over the last couple of years cannot be maintained”.

What clarity can the Minister offer on that issue in particular?

In his conference speech, the Chancellor of the Exchequer announced that beyond the autumn statement the Treasury would offer a guarantee to bidders whose projects

“meet UK priorities and value for money criteria”.

It is absolutely crucial that the Government outline what to

“meet UK priorities and value for money”

mean and whether that will cover projects currently funded by the EU. I hope that we will have some clarification on that, too. With today’s announcement of a hard Brexit package, in an attempt to appease certain elements in the Prime Minister’s party—as I said earlier, her Chancellor appears intent on pursuing some sort of trade war or commercial war with our European partners—it has become clearer and clearer that those who may suffer will be the ordinary people, the ordinary businesses and the ordinary working people the length and breadth of Wales.
 

Kevin Brennan
I am grateful, again, to my hon. Friend for giving way. He makes some important points about new infrastructure. Are there not also serious implications for existing infrastructure, including our industrial base—for example, the Ford motor plant in Bridgend—if we are seriously saying that we are not interested in staying in the single market? Should the Minister not be telling us how he is going to ensure that plants such as Ford’s have a future in relation to the integrated way in which motor cars are made across Europe?
 

Stephen Doughty
Absolutely. The same could apply to the steel industry. Companies such as Celsa, in my own constituency, that are part of a European operation have plants in many places.

 

Mark Tami (Alyn and Deeside) (Lab)
Before my hon. Friend moves off this point—Airbus is probably the best example. If a wing is not finished, the workers will follow the wing, whether to Bremen or France, to make sure that that is done. Are we really saying that they will have to fill out forms, do all sorts of things and wait God knows how many weeks for that to happen? The problem is that we live in a very uncertain climate at the moment.
 

Stephen Doughty
I absolutely agree. Airbus is always an excellent example and is a crucial player in the Welsh economy, not only in the manufacturing of the wings and aircraft components, but in its defence and space business, which is in the constituency of my hon. Friend the Member for Newport West (Paul Flynn) but employs many people from my own constituency. Let us not forget that this is about not just the infrastructure funding that has come from outside, from European funds, but the infrastructure funding decisions that major companies make themselves and whether those will be put at risk when companies are not sure about the future.
 

Mrs Madeleine Moon (Bridgend) (Lab)
It is also about giving Welsh workers confidence. Taking up the point made by my hon. Friend the Member for Cardiff West (Kevin Brennan) about Ford, there is great anxiety in the plant about the future and security of their jobs. These are highly skilled and highly paid jobs. If workers do not know that they can be assured of long-term employment, they are not going to invest and spend, and we need that to keep the Welsh economy turning.
 

Stephen Doughty
My hon. Friend makes a crucial point. I am delighted that the top focus of the First Minister, Carwyn Jones, and the Cabinet Secretary for Economy and Infrastructure, Ken Skates, and others, has been on ensuring that the Welsh Government have continued to provide certainty where they can, whether that is to industry, infrastructure or building projects. Clearly, we need to keep investing—whether that is in schools and hospitals, as is happening in my constituency, in supporting businesses or in the work being done to support the steel industry—and that can help to provide confidence. However, without clarity on these very large sums of money and on the UK Government’s intentions in that regard, we can only go so far in terms of what Wales is able to do.

I hope that the Minister can give us clarity today. We need guarantees that funding will continue for Welsh infrastructure following any deal to leave the European Union. Wales voted to leave the EU—although not in my constituency—but it did not vote to see investment in Wales cut by a UK Government, and we need those assurances urgently.

Things may work out for us in the long term. Undoubtedly our country, Wales— and this country, Britain—have a history of coming together in difficult circumstances and of finding a way forward for our people when they are faced with difficult challenges. However, the plan may turn out to be reckless, with huge consequences for our economy, jobs and the unity of our country. The Prime Minister should have been here today to account for the plan. I am glad that the Minister is here, and I hope to hear answers to the questions that I and other colleagues raise today.

 

2.51 pm

 

Paul Flynn (Newport West) (Lab)
I am delighted to be called to speak so early in the debate, Mr Flello.

We listened to the dribble of nothing from the Prime Minister in one of her typical speeches, which are heroically adjectival but ultimately vacuous, and her love of soundbites and meaningless phrases is clear. She talked about having a red, white and blue Brexit, but in Wales we want a red, white and green Brexit. We want one that is tailor-made for Wales, because our situation is unique in almost every way in the British Isles.

We are talking about infrastructure today. Gerald Holtham—a very accurate observer of these matters—has pointed out that although the amounts of money we get from Europe are not a huge percentage of Welsh GDP, they are 20% of our infrastructure funding. A huge amount of money is being provided for all the schemes that my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty) listed in introducing the debate. In my intervention I mentioned the Dŵr Uisce scheme, which is a unique example; it does not affect England in the same way. That exciting project is being run by Trinity College Dublin and Bangor University. It has cutting-edge technology, using small turbines in an ecologically sound way to produce energy. The scheme could have marvellous repercussions and pay huge dividends in future, but it will be in a very strange position, because half the scheme will be outside the European Union and half will be inside it. That is one of many complications that will arise from the hell of Brexit that we are facing.

Remember the reason why Brexit is happening and why the Prime Minister made that speech today: it is all about solving internal problems in the Conservative party. That explains how we got into it and how we are now proceeding. At the moment, the Conservative party is a pressure cooker likely to explode in three directions—there are the hard Brexiteers, the soft Brexiteers and the anti-Brexiteers—and all that we have heard today from the Prime Minister is an attempt to soothe future problems with a honeycomb of sweet words that ultimately mean little.

The Chancellor of the Exchequer has talked about bumps in the road, but I fear that there will be a giant sinkhole in the road into which the economy could slip in freefall. Very dangerous years could be ahead of us economically. There was talk today of us turning into some kind of banana republic on the world stage, and not being one of the great economies. Standards are going to fall down to the bottom. They will not be brought up to the top, and we will not continue down the stable path that we were on in the past. Brexit is a great gamble, and it is right to look at it from a Welsh point of view.

Important issues in Wales come up again and again, as they did when the Select Committee on Welsh Affairs went out of Parliament to meet the people, having asked for their response. I took part in two such events. Someone who came to Aberystwyth said that he worked for a company that was about to expand in Ceredigion. However, post-Brexit, the company has taken the decision to expand in Ireland. Someone else came to the meeting in Prestatyn to talk about the tidal scheme off Anglesey. That interesting scheme uses tidal flow and is very different from what is happening in Swansea. We know  that hydropower and tidal power are Wales’s North sea oil. They are a huge resource and their prospects for the future are marvellous, because of the nature of the tidal flows that go around our coast. A huge cliff of water moves around the coasts of Wales, providing great pulses of electricity throughout the 24-hour cycle. All the calculations are based on using tidal power alone, and they have not taken into account the ideal solution, which would be combining tidal power with pumped storage schemes such as the Dinorwig power station. That would make tidal power entirely demand-responsive. The pulses of electricity that arrive in the early hours of the morning could be used to pump the water up the hills, and then the value of the electricity could be multiplied threefold or fourfold by pumping it down when electricity is in high demand. That will be the future of clean, renewable electricity for Wales.

Another issue that comes up at all these sessions, because farmers are a very well-organised group, is farming in Wales, which is again unique in the British Isles. We have a cultural imperative for supporting the farming industry, because it is the last redoubt of Welsh language and culture. It is at its finest and purest in the farming communities and has gone, sadly, from the anthracite coal areas where it used to be. If we want to invest in the culture in Wales and in our precious, unique heritage, we have to invest in it as a cultural treasure that we all feel is of immense value.

However, the main reason for supporting the farming industry is what it does in Wales as a resource and a source of occupations. It is very different from England. If we are going to have our red, white and green solution, we need an entirely new policy on farming.
 

Chris Davies (Brecon and Radnorshire) (Con)
As usual we have heard the platitudes—the Brexit-denial language—that we are used to from the hon. Gentleman, but to get back to the subject of the debate, does he not agree that many parts of Wales have not benefited from European funding? In fact, the European funding source has been very unfair to certain parts of Wales, and a new post-Brexit scheme may be much fairer for the whole of Wales.
 

Paul Flynn
The hon. Gentleman has not said which parts of Wales he has in mind, but it was noticeable that the parts of Wales that had the greatest amount of infrastructure investment were the least enthusiastic, sadly, for staying in the European Union. If we are looking for a policy, it must be a new one. If Brexit goes ahead, we must take advantage of it to get a Welsh solution for Welsh problems. Take agriculture, for instance: we do not have farmers getting subsidies of £2.5 million. They do not get £750,000—not that I know of anyway—but the Mormon Church gets that. The royal family get subsidies of £500,000, but in Wales the average subsidy is about £13,000, and we have a preponderance of small farmers.

Let us start again and have a scheme with a cap on it so that we do not give huge subsidies to billionaire and millionaire farmers. We must concentrate subsidies on what are necessary in Wales: the small farmers. We should look at Brexit as an opportunity to have a scheme that is fairer and will help the environment. There should be a strongly environmental imperative in all the subsidies that are given, and we should put a cap  on them, as we put a cap on other things such as welfare payments. I cannot see why anyone should have a subsidy of £94,000, as one farmer in Wales gets regularly, even though he does not appear to be in need of subsidies. We should look at how income support is paid out. To make the farm industry stand on its own feet and be self-supporting, as happened in 1985 in New Zealand, we have to change the pattern of subsidies, and Brexit is the opportunity to do so.

Many of us bitterly regret what happened in the referendum. During the campaign, I said the victors would be the ones who told the most convincing lies, which turned out to be right. Both sides presented a case that was false. We are certainly not going to get our £350 million for the health service every week, as was written on the side of the red bus, and we did not have the economic collapse that was threatened by the other side. The votes that were taken—a snapshot on one single day—were based very much on public relations spin. The same people who directed the leave campaign are the same people who directed the entirely dishonest alternative vote campaign a few years ago and who ran the campaign about devolution in the north of England. We are handing over the power of decision to the PR specialists and snake oil salesmen, and public opinion is manipulated and persuaded by the PR industry and the tabloid press.
 

Chris Davies
Without question I respect the hon. Gentleman’s years in this House, but do you honestly believe you are helping the Brexit cause by using such language and continuing the route you are now on? Looking at your hon. Friends’ faces as you speak, it does not look to me as though you are helping them in this debate, never mind the cause that you are trying to put forward. We are all Brexiteers now and we need to move forward, not backward.
 

Robert Flello (in the Chair)
Order. Before the hon. Gentleman takes his seat, I remind him that “you” refers to the Chair in debates.
 

Chris Davies
I apologise.

Robert Flello (in the Chair)
I think the hon. Gentleman was referring to the hon. Member for Newport West. Mr Flynn, may I suggest we come back to the subject of the debate and not make it too wide-ranging?

Paul Flynn
We face the inevitability of Brexit. The House will almost certainly agree to go ahead with article 50, and perhaps in two years’ time, when the breach has to be made, an informed view will be taken of what has resulted from that decision. We are the elected representatives of public opinion in Wales. We were not elected on one day. Many of us have been elected on many days. My first election was in 1973—it is not a single decision that is taken on a single day. We have a duty in this House. When it comes to finally deciding whether we break away, we must remind ourselves that we will then know the economic consequences, and we should remember that second thoughts are always better than first thoughts.

 

3.04 pm

 

Mrs Madeleine Moon (Bridgend) (Lab)
May I start by saying how inadequate I feel in following my hon. Friend the Member for Newport West (Paul Flynn)? I can assure him that on my face there was the great grin of delighted satisfaction that I always feel when I listen to him speak. There was certainly no grim look on my face; there was a broad grin.

The story of European funding in Wales is a little like the scene in “The Life of Brian” when someone asks “What have the Romans ever done for us?” The answer is nothing—apart from the aqueducts, the education, the clean water, the peace, the stability. What have the Europeans ever done for us? I must thank my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty) for securing this debate. It has been long needed and it is right for our constituents to know what they are about to lose.

I went to the offices of Bridgend County Borough Council and asked what funding had been coming into my constituency. Since about 2000, we have received more than £40 million, which is pretty stunning in its own right, and that was only for education, infrastructure and development programmes. The funding is an absolutely vital resource for Bridgend County Borough Council and its strategic partners, enabling the delivery of major infrastructure developments. We have seen, for example, £3 million to develop three strategic employment sites, allowing small and medium-sized enterprises to develop and grow in Bridgend. Bridgend is slap bang in the middle between Cardiff and Swansea. People do not know what comes out of Bridgend, but the number of niche unique firms in the county borough of Bridgend that provide critical employment to highly qualified individuals is absolutely amazing.

Nearly £3 million from the European regional development fund has been invested in Bridgend town centre, which has been radically changed. It is a different, vibrant economy. My hon. Friend the Member for Ogmore (Chris Elmore) mentioned the junction 36 development, which is critical for both Ogmore and Bridgend. The bottom half of the site is occupied by McArthurGlen, which is in the Ogmore constituency. At the top half of the site is my large Sainsbury’s store. In between them are three huge car parks for people who come from my hon. Friends’ constituencies to shop in the county borough of Bridgend. It pulls in people from the whole of the south Wales corridor and even from over the bridge. People come into Bridgend for shopping who would not have come if we had not had that development.

Between 2000 and 2013, we had £12 million ERDF funding to deliver work programmes, including further regeneration work in Bridgend town centre, a tourism development with a watersports centre of excellence in Porthcawl, and coastal path, cycle path and footpath developments across the county borough, which are good for tourism and also good for the health and wellbeing of the people of the county borough.

The rural development programme brought in £5.5 million for micro-enterprise hubs at several venues. For the period 2014 to 2020, we are looking for £12 million for further infrastructure schemes in Bridgend town centre and Porthcawl and to develop SME premises across the county borough. There are also £1 million-worth of Welsh Government-led projects funded by the ERDF to undertake rural development for private sector employers.

So European funding has been instrumental in supporting projects to deliver skills, training and employment in my constituency and in that of my hon. Friend the Member for Ogmore. We have had £10 million to support young people at risk of disengaging from education and training. We have had money to support the long-term unemployed and economically inactive back into employment. Those are all key Government projects, yet that money may no longer be there. There has been £3 million for Inspire 2 Work, Bridges into Work 2 and Communities 4 Work. It is vital that the UK Government deliver on the guarantee provided by the Chancellor on 3 October at the Tory party conference. He said:

“The Treasury will offer a guarantee to bidders whose projects meet UK priorities and value for money criteria…that if they secure multi-year EU funding before we exit…we will guarantee those payments after Britain has left the EU.”

Great—but I want to know what happens after that. Can I guarantee that after we leave the European Union there will be, over a 20-year period, another £40 million coming into the Bridgend constituency? Bridgend voters voted to leave, but they did not vote for reduced infrastructure development, worse or fewer jobs, reduced education or employment skills, decreased development capacity or slow tourism growth. Certainly, there will be an impact on Welsh youngsters, who did not have their vote, and that will affect whether they consider coming back to Wales to work or look further afield. We need to keep young people’s skills in Wales, and keep a range of viable employment opportunities for them.

My constituency is between Cardiff University and Swansea University, and many university lecturers go from Bridgend to lecture at those universities. I cannot tell hon. Members how many people have expressed concern to me about the funding of science projects in Wales, and about dramatic changes to the health and wellbeing of the UK.

Finally, my hon. Friend the Member for Cardiff West (Kevin Brennan) spoke about Ford. Can the Minister finally give me an assurance that whatever deal was done for Nissan is coming to Ford? The last thing I need is for the Ford engineers in my constituency to decide that they cannot take a risk, and to move out to other jobs. I need that factory and the jobs to be viable. I need the assurance and I should like it today.

 

 

3.12 pm

 

Nick Thomas-Symonds (Torfaen) (Lab)
It is a pleasure to serve under your chairmanship for the first time, Mr Flello. I congratulate my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty) not only on securing the debate but on his comprehensive and thoughtful setting out of the issues. It is always a pleasure to follow my hon. Friend the Member for Bridgend (Mrs Moon); and I am sure that all Members from south Wales would give testament to the fine shopping at McArthurGlen.

 

Mrs Moon
And Sainsbury’s.
 

Nick Thomas-Symonds
Absolutely. It is also a pleasure to follow my hon. Friend the Member for Newport West (Paul Flynn). Whenever my hon. Friend speaks we learn something new; I am sure we are all very grateful  for that. As to the hon. Member for Brecon and Radnorshire (Chris Davies), I am slightly worried about the way he reads facial expressions. He may end up getting his enemies and friends the wrong way round in future.

I totally accept the result of last year’s referendum. The Torfaen local authority area had a 59.8% leave vote, and the Torfaen parliamentary constituency makes up the substantial part of that local authority. It is crucial that the result should be respected; but whether people voted remain or leave, they deserve—in Torfaen and across Wales—a Government determined to deliver economic prosperity and to have a clear, coherent negotiating strategy to that end. Before I entered the House I was, among other things, a barrister and a mediator. I know only too well that no one should reveal the fine detail of their negotiating strategy before they begin; but that is not what the Government are being asked to do. We have heard from the Prime Minister today, but what concerns me is that not once has she given a coherent vision of post-Brexit Britain. As my hon. Friend the Member for Cardiff South and Penarth pointed out, we are left with a nightmare scenario of being an island, almost like a giant tax haven, off the end of the EU, instead of a place where inward investment and the floor of workers’ rights established by the EU will continue post-Brexit. We are also left with the impression that the Prime Minister is far more interested in the internal politics of the Conservative party than in the national interest.

Today’s debate is specifically about infrastructure. Wales has benefited tremendously from EU structural funding. When we talk about infrastructure, we must think about it in different senses. We have, of course, physical infrastructure, which my hon. Friend the Member for Cardiff South and Penarth talked about. I have already mentioned the south Wales metro project, which is one of many on which I hope the Minister will give far firmer guarantees. However, there is also the question of digital infrastructure. I commend the Welsh Government for their aim of every household in Wales having access to superfast broadband, and the great progress that has been made. Clearly, there is more progress to be made. I suggest that digital infrastructure will be vital to Wales’s future. There has been an increase in flexible working and the number of people working from home, and a substantial number of people are self-employed throughout the United Kingdom now; all of them will be reliant on the broadband speed available to them at their business premises and at home. That infrastructure, too, must be funded. The Government must have a coherent vision so that, without the European structural funds coming down the line, such things can be realised.

The Minister and the Secretary of State for Wales can play a crucial part in what happens, but they must be the voices of Wales in the Government, standing up for funding. They cannot become, in the years to come, the Government’s voice in Wales. The referendum has of course gone, and we have to concentrate on how Wales is to have a substantial number of highly skilled jobs, such as those in Bridgend that we heard about, and others mentioned by my hon. Friends. That is the vision of Wales that we must deliver, and I hope that the Government will put aside their internal divisions to take it seriously.

 

3.17 pm

 

Christina Rees (Neath) (Lab/Co-op)
It is a pleasure to serve under your chairmanship for the first time, Mr Flello. I commend my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty) for securing this important debate and setting out the issues in his usual elegant style. I associate myself with many of the comments made by my hon. Friend the Member for Bridgend (Mrs Moon). I was a Bridgend councillor before I became an MP, and she was my MP. It is always a pleasure to follow my hon. Friend the Member for Torfaen (Nick Thomas-Symonds).

Infrastructure is important in all parts of the UK, but in Wales, the region most affected by deindustrialisation, which is still reeling from neglect of public spending in the 1980s—a place which has mountains and valleys in abundance—the need for investment in all forms of infrastructure has never been greater. The uncertainties of leaving the European Union remain fraught with danger. Beyond the loss of environmental protections, trade agreements and workers’ rights, the impact on the economy is still unknown. However, in Wales the threat to structural funds remains a primary concern, and one that will define the Brexit negotiations and the Government’s ability to respond.

A reduction in the amount of funding available for infrastructure projects in Wales, should the UK Government not commit to fully replacing it, will be catastrophic. It is widely accepted that Wales has been a net beneficiary of the European Union, benefiting from billions of pounds of investment. The referendum results across Wales suggest that that message did not permeate communities, but that is astonishing, given the facts that surround the argument. The annual average allocation of EU funding in Wales is €65 per person, compared with €13 across the UK. Wales receives over six times more European structural and investment funding than England. That is not only astounding and depressing, given the qualifying criteria, but concerning given our potential reliance on the funding, and on the UK Government’s commitment to underwriting it after we leave the EU. To put things into context, the European regional development fund, the only European structural and investment funding directly concerned with infrastructure, committed €106 million to Wales during the 2014 to 2020 programme, under the theme of network infrastructures in transport and energy.

Allow me to highlight some real-life examples of the difference that those vast figures make to infrastructure projects in Wales. The superfast broadband business exploitation project, which seeks to increase the take-up of fibre and ICT infrastructure by small and medium-sized enterprises, has secured €6.3 million in the regional development fund. The tourism attractor destinations project, which aims to increase employment through investments in prioritised local or regional infrastructure, has received £27.7 million in ERDF investment.

Closer to home, I can speak of three projects that would not have happened without ERDF funding. The Neath Port Talbot integrated transport hub will use upwards of £5 million in European investment to create a transport modal interchange facility to promote public transport across the area. SPECIFIC, an academic and industrial consortium led by Swansea University to address the challenge of low-carbon electricity and heat by enabling buildings to generate, store and release their  own energy, has secured nearly £15 million in ERDF funding and almost certainly would not exist without it. Lastly, the world-class Swansea University bay campus, which I have mentioned, is a multi-partner investment of £450 million, including almost £40 million in European regional development fund money. Those examples do not highlight the value and impact of directly funded European Commission programmes such as the Connecting Europe Facility and Horizon 2020, which are far more difficult to quantify but just as important as those funded via the UK or Welsh Governments; Horizon 2020 alone has awarded grants worth €40 million to organisations in Wales.

Post-Brexit guarantees are worryingly sparse on detail. Although the Chancellor has given a number of promises relating to any lost EU funding, those promises extend only to structural and investment fund projects signed before last year’s autumn statement. For projects signed after that, the commitment is far vaguer. In his conference speech last year, the Chancellor suggested that he would offer guarantees to projects that “meet UK priorities and value for money criteria”,

But he has repeatedly failed to set out what those priorities and criteria will be. Surely the Chancellor of the Exchequer of Her Majesty’s Government has a responsibility to instil confidence in Welsh businesses and investments, not undermine it.

Another effect on infrastructure in Wales of the UK leaving the EU will be that the Welsh Government and local authorities have fewer sources from which to seek funding or sustainable loans. The European Investment Bank’s lending to the UK in 2015 amounted to €7.7 billion, of which two thirds, or €5.5 billion, went to infrastructure. Those figures are staggering. The thought of losing that funding leaves me cold. The Swansea University bay campus secured not only substantial ERDF funding but an EIB loan to the value of £60 million. That funding is sustainable, vital and irreplaceable.

Finally, I am concerned about a post-Brexit Wales where UK goals and priorities may be different from the EU priorities on which Wales and its Government have established plans and strategies. What will happen to the electrification of the Great Western line, the South Wales metro and the city deals?

 

Nick Smith (Blaenau Gwent) (Lab)
 

Does my hon. Friend agree that the Government need to confirm that our transport infrastructure investment needs will be secured for the future? Our valley lines have been a great success, but much improvement is still needed, and electrification in particular must be delivered. For that to happen, funding must be guaranteed for phase 2 of the metro system. The project will help jobs in our south-eastern valleys. The Minister must confirm that that will happen.
 

Christina Rees
I agree completely with my hon. Friend’s valuable point. I hope that is confirmed in the near future.

What will happen to the electrification of the great western line, the South Wales metro, the city deals and Swansea Bay tidal lagoon should they not be priorities for the UK Government once we have exited the European Union? The Government’s support to date for some of those projects has been questionable, as my hon. Friend the Member for Swansea East (Carolyn Harris) said,  without the pressure of committing to replace any funding lost post-Brexit. They must rise to the challenge and put in place the necessary guarantees to instil confidence in our businesses, universities and investors. They must commit to replacing any funding lost by projects currently in development but not yet signed, and demonstrate to the people of Wales that we have a Government who work for everyone.

 

 3.26 pm

 

Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)
It is a pleasure to serve under your chairmanship, Mr Flello. I congratulate my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty) on securing this debate and on outlining a powerful case. He made the point that it is important that powers returning to the UK are devolved to Wales to help the Welsh Government to drive forward the regeneration of Wales. He also mentioned the current programme of EU funding, which involves some £3 billion in investment across Wales. In 2014 alone, the net benefit to Wales was £245 million, which demonstrates exactly how much benefit Wales gets from the European Union. He was right to point out that we heard vague commitments from the Prime Minister today, but nothing to give certainty on the regeneration infrastructure that Wales needs to continue. He was also right to point out that Wales did not vote for cuts to regeneration infrastructure projects. That is developing from the chaos unfolding before us.

Hon. Members have made significant points clarifying what risks our exit from the European Union will bring to infrastructure in their constituencies and across Wales. We heard from my hon. Friends the Members for Alyn and Deeside (Mark Tami), for Cardiff West (Kevin Brennan) and for Cardiff South and Penarth about Airbus, Ford, Celsa and many other firms that develop their products across Europe, and the major and problematic impact that a hard Brexit would have on those businesses and many others.

We heard from my hon. Friends the Members for Newport East (Jessica Morden), for Swansea East (Carolyn Harris) and for Blaenau Gwent (Nick Smith) about infrastructure projects such as the metro, electrification of the valley lines and the Swansea Bay tidal lagoon. My hon. Friend the Member for Newport West (Paul Flynn) outlined the unique issues facing Wales from our exit from the EU, and the need for a red, white and green project to develop policies that take account of our unique heritage. We also heard from my hon. Friend the Member for Ogmore (Chris Elmore), who discussed the impact that uncertainty will have on local government’s ability to deliver larger-scale projects. My hon. Friend the Member for Torfaen (Nick Thomas-Symonds) stated that, although he respects the result of the referendum, whether we are leave or remain, we need a clear vision. As he pointed out, that is sadly lacking in this Prime Minister, who seems fixated on internal factions within the Tory party.

My hon. Friend the Member for Bridgend (Mrs Moon) highlighted the impact that European funding has had on her constituency, including a total of £40 million within the Bridgend County Borough Council area since 2000 for educational and infrastructure projects. As in many constituencies across Wales, the strategic development sites have supported small and medium-sized enterprises. There have also been town centre enhancements,  which again are common in lots of constituencies across south Wales. My hon. Friend the Member for Neath (Christina Rees) talked about the fact that Wales is affected by deindustrialisation and a lack of investment that dates back to the ’80s and ’90s. She said that Wales still has a significant need for structural funds and spoke about projects such as the integrated transport hubs, which again are regeneration projects that have happened in constituencies across south Wales.

In our last debate in this Chamber just before Christmas, I asked the Minister a number of questions, which unfortunately he did not answer. I say to him today that I approach this debate with a genuine desire to have a response from the Minister on the record. I expect him to tell me that he has already answered some of my questions, so, with the greatest of respect, I hope that he will have no problem repeating and clarifying that information and putting it on the record today.

I have no desire to use this debate for gamesmanship or to score cheap political points. The impact of the exit from the European Union on our constituencies and on Wales as a whole is far too important for that. But we need answers. Leaving the European Union will have a significant impact on the funding and development of infrastructure across Wales. That is in absolutely no doubt.

Wales has received more than £2 billion of capital investment in social housing, transport, energy, water and education through the European Investment Bank in the past decade. As my hon. Friend the Member for Cardiff South and Penarth outlined, between 2014 and 2020, £1.9 billion of European structural funds will have driven total investment of almost £3 billion across Wales.

The benefits of that European investment have been seen in major projects, such as the Cardiff University Brain Research Imaging Centre, the Menai Science Park, the Swansea University Bay Campus in the Neath-Port Talbot area, and the Deep Green marine energy technology. In my constituency, we have seen the dualling of the A465, the heads of the valleys road, which historically has had a poor safety record and links west Wales, across the top of the south Wales valleys, to the midlands, so it is a key route for business. We have also seen the investment in jobs created in our communities and various funding streams for social programmes to support the most marginalised and vulnerable in our society.

As those facts demonstrate and as we have heard from hon. Members today, Wales has done incredibly well from European funds and support. So there are now serious and vital questions that the Government need to answer about what will happen to infrastructure support for Wales post-2020 and about what will replace EU funding.
 

Stephen Doughty
My hon. Friend is making a strong speech and summarising many of the key challenges, specifically the challenges about infrastructure funding. However, does he share my worry that there is a wider challenge? In the Chancellor’s comments the other day, translated I believe from German, he said that

“we will have to change our model to regain competitiveness. And you can be sure we will do whatever we have to do.”

Does my hon. Friend worry that we may be moving away from a programme of investment to reduce inequality  and to focus on jobs, to one of a race to the bottom on tax, regulation and all those issues, which would damage the prospects for Welsh workers and businesses?

 

Gerald Jones
I do indeed; that is a very real concern. My hon. Friend highlights some of the chaos in the Government’s thinking on this matter. I hope that we will hear more from the Government in the near future to end the uncertainty and to provide some clarity about exactly what they intend to do.

During the referendum, we were assured by leave campaigners, including a number of senior Tory Ministers, that the UK and Wales would not lose out as a result of our exiting the EU. It is now time for the Government to deliver on the assurances that were given. Businesses and investors need certainty about the infrastructure and environment that will support their long-term decisions, so it is vital that the Government now make it clear how they will offset the negative consequences of EU exit for infrastructure in Wales. I hope that the Minister can give some clarity on what funding streams he envisages will replace EU funding post-2020, and outline his Department’s assessment of how much funding there will be.

Furthermore, even before we reach 2020, we need clarity on the guarantee made by the Chancellor, which was mentioned by the Minister and the Secretary of State for Wales in the media. To be fair, the Chancellor has announced that the Treasury will guarantee all multi-year EU business funding agreed before our exit. However, the detail appears to be a little more complex. For what it is worth, the Treasury said that it will

“put in place arrangements for assessing whether to guarantee funding for specific structural and investment fund projects that might be signed after the [2016] Autumn Statement but while we remain a member of the EU. Further details will be provided ahead of the Autumn Statement.”

However, as my hon. Friend the Member for Neath commented, the specific assessment criteria mentioned in the Treasury’s statement were not provided ahead of the autumn statement and they have not been formally put on the record or disclosed in specific terms.

The Minister and the Secretary of State for Wales have repeated the claim that all projects before we leave the EU are secure, but can the Minister now say—purely for clarity and to have it on the record—what the assessment criteria will be to guarantee funding for specific projects that are signed between now and when we leave the EU? Can he also be clear exactly what will be used to assess that and which projects, if any, he expects not to pass that assessment?

Can the Minister also pledge today to guarantee loans made by the EIB to projects in Wales before we leave the EU? When my hon. Friend the Member for Cardiff Central (Jo Stevens), who is the shadow Secretary of State for Wales, raised that issue at the last Welsh questions, the Secretary of State for Wales said only:

“Our negotiations with the EIB will run in parallel with our negotiations with the European Commission. The hon. Lady has a responsibility to try to instil confidence in investment in Wales, not to undermine it.”—[Official Report, 30 November 2016; Vol. 617, c. 1505.]

To accuse the Opposition of undermining investor confidence in Wales simply by scrutinising the Government  and asking them to reveal to Members, investors and the Welsh public what their plans are is, clearly, remarkable.

Consequently, in a spirit of openness and constructive dialogue on this most crucial of issues, will the Minister tell us whether the Government plan to guarantee loans made by the EIB to projects in Wales before we leave the EU? If not, what assessment has been made of the projects that will not be underwritten, the potential cost of that to the Welsh economy and what jobs may be at risk as a result?

Time is marching on and the longer the uncertainty goes on, the more detriment will be caused to projects, businesses and communities across Wales. I hope that the Minister will provide some answers this afternoon to allay the genuine and growing fears that we now hear almost daily. Will he also take this opportunity specifically to address the issue of the funding received from the European Territorial Cooperation programmes, which provide opportunities for regions in the EU to work together to address common social, economic and environmental challenges? Wales has benefited hugely from that. Examples of other such projects include the Ireland Wales programme, the Atlantic Area programme, the North West Europe programme, Interreg Europe, the European Spatial Planning Observation Network and Interact, which are worth billions of pounds to Wales. Will the Minister clarify what discussions the Government have had about whether the UK, outside the EU, would be eligible for any of those programmes? If it is not eligible and if Wales is no longer able to secure funding through those EU initiatives, what plans do the Government have to replace the funding?

Long-term infrastructure investment in Wales is vital for the future of our economy, jobs, investment and growth. The Government have a responsibility to ensure that we get the best possible deal from Brexit. It is not good enough just to say that we will get the best deal, whatever that means. Our constituents, businesses and investors need details of what funding will be available, what infrastructure projects will go ahead and what criteria other projects will have to meet before they can go ahead.

The Minister needs to get away from the rhetoric of our previous debates and earnestly give some answers today. I hope that he will take this opportunity to provide us with some answers. I hope that he appreciates how important these decisions and this debate is.

3.39 pm

 

The Parliamentary Under-Secretary of State for Wales (Guto Bebb)
It is a pleasure to serve under your chairmanship this afternoon, Mr Flello. I, too, congratulate the hon. Member for Cardiff South and Penarth (Stephen Doughty) on securing the debate and, indeed, on the fact that today turned out to be an opportune moment to be discussing EU funding and the effect of leaving the European Union on infrastructure investment in Wales.

It is fair to say that there has been a contribution from EU funding into infrastructure investment in Wales. No one who represents any part of Wales would argue that that is not the case, but it is important to place that investment in context, in relation to the south Wales metro, for example, which is a fantastic project that will make a huge difference to south-east Wales and to  which the Wales Office and the UK Government are fully committed. The UK Government’s investment in the scheme is £500 million, while that from European funding is £106 million. That £106 million is crucial, but it is important at the outset to clarify one point once again. I regret that, having made this point on numerous occasions, I have to make it again. I must be speaking very improperly if Opposition Members have not understood thus far. The guarantee is in relation to any EU-funded project that is put in place and secured prior to our leaving the European Union.

The decision as to whether a European project in Wales is in accordance with the UK Government’s priorities is based, in effect, on whether the Welsh Government are in favour of the project. European-funded projects in Wales are signed off by the Welsh Government. If the south Wales metro scheme is under way and there is a commitment of £106 million of European funding for the project, that £106 million will be underwritten by the Treasury. I hope that that is clear—it is as clear as I can make it. The Welsh Government make decisions regarding EU funding in Wales, and that might have been part of the problem in the past because, I would argue, the money has not been spent as well as it should have, but it is crucial to understand that if the Welsh Government are in favour of a project and it is signed off before we exit the European Union, that guarantee is in place.

Albert Owen (Ynys Môn) (Lab)
I apologise, Chair, for not being here for most of the debate. I have been in the Chamber trying to catch the eye of the Speaker on this very issue. The Minister is right that many of the infrastructure schemes are projects initiated by the Welsh Government, but INTERREG, which has been important to west Wales and links to Ireland, may now be under different criteria. Will the UK Government, as signatories to the European Union, guarantee those projects in future? With today’s announcement of a common travel area, does the Minister envisage special status for west Wales ports?

Guto Bebb
As the announcement was made only today, it would be incorrect of me to respond immediately to the question of special status for west Wales ports. The hon. Gentleman is perfectly right that decisions relating to INTERREG funding will remain with the British Government but, on EU structural funds in a Welsh context, I hope that I have offered the clarity that the hon. Member for Cardiff South and Penarth (Stephen Doughty) requested.

It is crucial to understand that the investment in the south Wales metro is part and parcel of the electrification of the Great Western main line, because unless that line is electrified the metro system will not work as we envisage. Across the divide in this debate, we should at least recognise that the investment being made in rail infrastructure in Wales, both north and south, is both to be welcomed and crucial.

Stephen Doughty
The point that my hon. Friend the Member for Ynys Môn (Albert Owen) made is absolutely crucial, and it raises a wider question about what the suggestion of engagement, with both the Welsh Government and the Welsh Assembly, means. It is not clear, is it, whether if we did not like parts of the deal—solutions,  for example, regarding the common British-Irish travel area—we could dispute, veto or change them in some way? Or is it a like-it-or-lump-it strategy?
 

Guto Bebb
I sincerely hope it would not be a like-it-or-lump-it strategy, because that would not be proper engagement. Proper engagement means listening to the arguments being made by the devolved authorities and taking their views into account. It is clear that a decision will have to be made on a UK basis. I suspect that the hon. Gentleman is not arguing that we should have different settlements for different parts of the UK in relation to exiting the European Union.

We entered the European Union as a United Kingdom and I suspect we will leave as a United Kingdom, but it is imperative in that debate that we take on board the arguments being made by the devolved Administrations. It is important to highlight that we, as a Government, have set up Joint Ministerial Committees to ensure that those discussions happen on a Minister-to-Minister basis. I have been part of those discussions, as a representative of the Wales Office. So this is not a case of attempting a Westminster fix that ignores the views of the devolved Administrations; it is a genuine attempt to take on board the concerns of those Administrations, to ensure that we come up with an approach that reflects the complexities of the United Kingdom.

Paul Flynn
Does the Minister seriously believe that the problems post-Brexit in the home countries will be the same as the problems in England? A red, white and blue Brexit is an England-centric one. The problems in Wales and Scotland, and certainly in Northern Ireland, are unique to those countries and we need Brexit solutions that are tailor-made for the four home countries.
 

Guto Bebb
I am somewhat surprised by the hon. Gentleman’s comments, because I do not think he would argue that every single part of England has the same issues. The issues in Cornwall are very different to those in London; indeed, there is a devolved Administration in London. Also, we are seeing a devolution process in the north of England and the issues facing the north of England will be very different from those in the midlands. I suspect that the Government have a responsibility to listen to arguments being made by all parts of the country. We are a Government who are listening on this issue.

I go back to the structures that have been put in place. Those structures are working. I have attended meetings with Ministers from Wales, Scotland and Northern Ireland. Unfortunately, such meetings are not currently possible, and that is a regret, but they have been constructive and for a purpose. I can assure hon. Members that views about the priorities are expressed very strongly in all parts of the United Kingdom.

The hon. Member for Cardiff South and Penarth asked whether the engagement is serious, and I argue that it is. Certainly the meetings I have attended have been robust but very worth while.
 

Nick Smith
Will the Minister give way?
 

Guto Bebb
I will of course give way to my former colleague on the Public Accounts Committee.
 

Nick Smith
I acknowledge that the electrification of Paddington to Cardiff is being seen through, and I hope it will be a great success. However, as the Minister knows, that project has cost a lot of money and has seen significant delays which, I think, have led to the delay in the delivery of the Cardiff to Swansea electrification. I think that the Minister will find that hard to deny. What I want from him today is a guarantee that he will ensure that the UK Government will support the Welsh Government to deliver the electrification of the valleys lines so that that is not shunted off into the middle distance and not delivered.
 

Guto Bebb
The assurance I can give is that my Department and this Government are committed to the south Wales metro scheme, which includes the need to electrify the south Wales valleys lines. The excitement that is felt about that project is not confined to south-east Wales; as a north Walian, I see it as a coherent strategy to revitalise the valleys. Cardiff is a huge success story, with jobs being created, and the south Wales metro scheme will make it so much easier to ensure that people in the valleys can be part of that. Listening to this debate will perhaps make people forget that we have success stories in Wales. I understand and fully support the view that the project is dependent on the electrification of the Great Western main line, but although there have been delays with that work, that does not prevent this investment.

The £500 million coming from Westminster for the south Wales metro scheme is on top of the settlement for the Welsh Government, and it is important to state that the investment we are seeing in infrastructure such as the railways is complemented by a significant increase in the capital funding of the Welsh Government, which has come through as a result of budget announcements, and which I hope all hon. Members welcome.

In addition, there has been significant discussion about and development of the possibility of a city deal for Swansea and the west Wales region, which is imperative, and work is being undertaken on a north Wales growth deal. What is exciting about the development of a city deal in the north Wales context is the constructive engagement between Westminster, the Welsh Government and partners on both sides of the north Wales border. There is an understanding that a growth deal, and infrastructure investment as part of that, is dependent on co-operation between the north-west of England and north Wales, and between the Welsh and UK Governments. I stress again that the relationships that are being developed as a result of the work on the city region deal in Cardiff, the Swansea city region deal and the north Wales growth deal are building confidence between the Welsh and UK Governments.
 

Albert Owen
At the inception of the north Wales growth deal, it was envisaged that it would include European money, because it was linking England, Wales and the Republic of Ireland. Is the Minister suggesting that there will be a bid to Europe before we exit the European Union? If that is not the case, does he envisage the UK Government working with the Irish Government and the Welsh Government to get that funding?

Guto Bebb
The hon. Gentleman is well aware that the north Wales growth deal, in partnership with the Mersey Dee Alliance and so on, is dependent on a bottom-up approach. The answer to his question is that if the scheme and a deal are in place in good time to make an application for EU funding, it might be possible, but it depends on the timing. We are not a Government who say, “We know best in Westminster.” We are certainly not a Government who think Cardiff knows best. The city deals are based on growth from the bottom up. They are successful, and I hope they are proving their worth. It is a new way of working, and hon. Members should take it on board.

On investment in infrastructure and the co-operation between the Welsh Government and Westminster, the hon. Member for Torfaen (Nick Thomas-Symonds) highlighted an important point about investment in our digital infrastructure. We should at least willing be to concede that more than 11% of the entire funding at the UK level for broadband connectivity was allocated to Wales. I openly congratulate the Welsh Government on match-funding that investment with European funding. We know that great strides have been made on broadband connectivity in Wales, but more should be done. That is why I was absolutely delighted to be involved in a conference in Cardiff last week—it was attended by the Welsh Government Minister—on how we could further improve broadband connectivity and, more important, ensure that we have adequate mobile communications in Wales. We also need to look at how we ensure that those areas of Wales that will perhaps not be reached by broadband connectivity will be able to access broadband via 4G and, in the future, 5G services.

Money is part of that issue, and there is a need for investment, but there is also a need to look again at planning issues, which are the responsibility of the Welsh Government. A very positive outcome of the meeting was that the Welsh Minister highlighted that the Welsh Government would have a meeting this week with stakeholders in Wales to look at whether the planning infrastructure needs to be changed to make it easier to provide mobile infrastructure.

The key point is that there have been changes to the planning infrastructure in England to allow taller masts without the need for planning permission, but the approach taken by the Scottish Government has been very different, and that is perfectly fine. As we have devolved Administrations within the UK, there is nothing wrong with having a response in Wales that looks at Welsh needs, a response in England to the situation in England and a response in Scotland to the Scottish situation. The key point I stress is that co-operation on the issue between Westminster and the Welsh Government is of vital importance for communities in all parts of Wales and for the economic prosperity of Wales.
 

Mrs Moon
I totally agree with what the Minister is saying about different views from different parts of the devolved Administrations in Wales, but funding for car manufacturers in the UK is a central Government decision and has nothing to do with the Welsh Assembly. Can I have the assurance that, whatever agreement was made with Nissan, there will be a comparable agreement for Ford and that assurances can be given that Brexit will not impact on the capacity of the Ford plant in Bridgend?
 

Guto Bebb
I assure the hon. Lady that on the third page of my notes of questions to respond to is the question on Ford in Bridgend. It is not just about Ford in Bridgend; we also have Toyota in north Wales, which  is a crucial part of the north-east Welsh economy. I can only repeat what was said to the Cabinet Secretary for Economy and Infrastructure in Wales, Ken Skates, in a meeting that I attended with Lord Price, the Minister of State for International Trade: nothing that was offered to Nissan is not on the table for Ford and Toyota.

I want to correct the hon. Lady, because some of the possible support for Ford and Toyota is a matter for the Welsh Government. Economic development is to a large extent a devolved matter. I fully accept the argument that, although the support might be coming from the Welsh Government, the reassurance has to be at the UK Government-level. I am delighted to say that we were able to say categorically that the deal offered to Nissan is on the table for Ford and Toyota when we were sitting in the office of the Welsh Government Economy Minister. Such businesses are crucial for the hon. Lady’s constituency in the same way that they are for north-east Wales, and we would not want to lose them under any future trading arrangements that we have with the European Union. Those commitments have been made and relayed to the Welsh Government.

Responding to the question that the hon. Member for Cardiff South and Penarth asked about engagement, there is nothing better than taking the trade Minister to see the Welsh Government economy Minister and giving those reassurances in person within a week of the decision being made about Nissan. That decision was welcomed by Opposition Members and by Government Members, because it was a vote of confidence in the workforce of the Nissan plant. That vote of confidence should be given for Ford and Toyota, too.
 

Kevin Brennan
Just to be clear on that point, is the Minister confirming today that the Government have offered absolutely the same deal to Ford as was offered to Nissan?

Guto Bebb
The hon. Gentleman is clearly attempting to distort my words. The assurances given to Nissan are available to Ford and Toyota in the same way. A meeting has been offered. The Welsh Government Economy Minister is aware that that offer has been made. The hon. Member for Bridgend (Mrs Moon) asked for assurances, and I hope I have offered them in as open a manner as I can.

On infrastructure, we have seen significant infrastructure in north Wales with the super-prison in Berwyn. That was another investment into north Wales by the UK Government over and above any settlement with the Welsh Government. The importance of infrastructure investment as a means of boosting the economy is highlighted by the fact that that prison development has resulted in a significant contract being won by a consortium that included Coleg Cambria, which is based in north-east Wales. We should welcome that success story.

I am running out of time so I will try to respond quickly to the specific questions asked by Members. The hon. Member for Swansea East (Carolyn Harris) is looking at me in anticipation of a comment on tidal  lagoons. Those of us who support the concept of tidal lagoons undoubtedly welcome the Hendry report, which was published last Thursday. News broke of Charles Hendry’s positive comments while I was at the mobile infrastructure summit in Cardiff Bay. The report was positive, but it was complex, too, and it needs to be looked at in depth. I sincerely hope that the Government will be able to respond in due course from a financial point of view to the issues with the cost of the tidal lagoon and the impact on the taxpayer and the electricity consumer. There is no doubt that the report was positive and needs to be taken seriously within Government. When the report was commissioned, many people said that the issue was being kicked into the long grass, but if they were looking for a negative report, that was not what they received. We are looking at the matter carefully, but there are no doubt issues still to be addressed over the next few months.

On the European Investment Bank, it is difficult to offer guarantees that the loans in question would be supported, but it is worth highlighting that the Chancellor has announced a £23 billion investment into the national productivity investment fund. We are putting in place alternative options for local authorities and stakeholders in Wales to bid into. Life after Brexit will not be the same as it is now, but that reflects that things will be changing.

I need to draw my comments to a conclusion. I apologise to Members if I have not been able to respond to specific points they have made, but I have certainly attempted to do so. The key point is that the decisions on leaving the European Union will be made on the basis of in-depth, proper consultation with partner local authorities throughout England and with the devolved Administrations in Cardiff, Edinburgh and Belfast. The key thing is that we must do the right thing for the people of the United Kingdom, whether they voted to remain or to leave.

Robert Flello (in the Chair)
Stephen Doughty, you have about 10 seconds.
 

 

3.59 pm

 

Stephen Doughty
Thank you, Mr Flello. I am conscious of the time. I thank the Minister for his comments. He has provided some helpful clarifications, but what is clear from all the comments today is that there are real-world impacts on jobs and businesses in our communities in all parts of Wales. The suggestion that we have had the totality of the plan we will receive is simply not good enough. We need more clarity. The Minister has provided some today, but not enough in some areas. That is why we need a Government White Paper so that we can all understand the future for Wales in the Brexit process.

Question put and agreed to.

Resolved,

That this House has considered the effect of the UK leaving the EU on infrastructure in Wales.

 

 

The debate is also available online at https://hansard.parliament.uk/commons/2017-01-17/debates/1F12E616-8823-4369-8885-4B8D8B381D5F/LeavingTheEUInfrastructureInWales.